When President-elect Barack Obama nominated Eric Holder for attorney general Monday, everyone on the transition team knew there was one big blemish on Holder's otherwise sterling record: his role in the pardon of a man named Marc Rich at the end of the Clinton administration.

What the transition team might not have fully anticipated is the intense scrutiny the incident would receive.

Soon after Holder became deputy attorney general in 1997, he sat down for an interview with an NPR reporter. Even then — although he was a rising star — he sounded a little wary of a job where people would scrutinize his decisions for decades.

"We're human, too. And to see things that are written about you that questions your motives, questions your integrity — I mean, that takes its toll," Holder said.

A few years later, in 2001, he was defending his integrity before Congress and the country about the pardon of Rich.

"As you can see from these facts, attempts to make the Justice Department or me the fall guys in this matter are rather transparent and simply not consistent with the facts," he testified.

Rich's ex-wife had donated hundreds of thousands of dollars to the Clintons. When prosecutors charged Rich with millions in fraud and tax evasion, he fled to Switzerland. A former White House counsel named Jack Quinn was hired to represent him.

Back at the Justice Department, Holder was in charge of overseeing pardons. Quinn lobbied Holder to get a pardon for Rich, and eventually, Holder told President Clinton that he was neutral, leaning toward favorable on the issue.

Holder did not check with his deputies first, nor he did ask for input from the prosecutors who had charged Rich in the first place. The next day — on his last day in office — Clinton pardoned Rich.

It became a huge scandal. Republicans such as Sen. Mike DeWine of Ohio accused Holder of distorting justice for his own self-interest.

"You knew he was a fugitive, and yet you didn't have any objection to that? Didn't the fact that he was a fugitive bother you?" DeWine asked.

Up to that point, the Justice Department had a tradition against pardoning fugitives.

Holder later testified, "In hindsight, I wish I had done some things differently with regard to the Marc Rich matter. Specifically, I wish I had ensured that the Department of Justice was more fully informed and involved."

Holder said he was so overwhelmed by the flood of last-minute pardon requests that he didn't give Rich's case the attention it deserved. That explanation didn't satisfy House Oversight and Government Reform Committee Chairman Dan Burton of Indiana. Quinn, after all, had served both Clinton and Gore.

"You knew Mr. Quinn had great influence with the president and probably the vice president, and you knew that they could help you become attorney general," Burton said to Holder.

"My actions in this matter were in no way affected by my desire to become attorney general of the United States," Holder responded.

Burton led a congressional investigation into the last-minute Clinton pardons. The report concluded that Holder "deliberately cut the rest of the Justice Department out of the process to help Quinn obtain the pardon for Marc Rich."

Democrats criticized that report, saying it was partisan.

Today, Holder's allies paint him as an innocent victim who was manipulated by Quinn.

Patrick Leahy of Vermont chairs the Senate Judiciary Committee, and he's friends with Holder. "I don't think President Clinton should have made the pardon," Leahy said, "but I don't blame Eric Holder for that. He's not the one that recommended the pardon. He's not the one that did the pardon."

Republicans have said they will ask about the pardon at Holder's confirmation hearing.

Some have gone further. Rep. Lamar Smith of Texas is on the House Judiciary Committee. He said in a statement, "If a Republican official had engaged in this kind of activity, he would never receive a Senate confirmation."

The Obama transition team knew from the beginning that the Rich pardon could be a stumbling block. They consulted with Republicans in Congress before making the nomination. And Obama announced Holder as his choice to be attorney general only when he was satisfied it would not be a serious threat to his confirmation.

Correction Dec. 4, 2008

In some versions of this story, we said that Eric Holder was nominated "last week." He was actually nominated on Monday.